We probably don’t need to tell you how hot Netflix is these days. No, chances are you already know that based on your long-running subscription to the streaming juggernaut and your love of hit Netflix originals like “Stranger Things,” “13 Reasons Why,” “Making a Murderer” and more. Yes, with thousands of hours of original content and the rights to other previously released content on the platform, you’ll never run out of things to “Netflix and chill” to. That is, if you’re into that sort of thing.
Noting Netflix’s hot streak, you also probably won’t be surprised to learn that Netflix posted better-than-expected first quarter earnings. Specifically, the company said its Q1 earnings were up 40 percent from a year ago, totaling some $3.7 billion – a record for the streaming service. Net income is up more than 60 percent to $290 million. And Netflix said it added close to 2 million new U.S. subscribers and about 5.5 million international subscribers – numbers that far exceeded initial estimates of 1.5 million and 5 million, respectively. To put this into perspective, these numbers are by far the best since the company went public way back in the spring of 2002.
Presently, Netflix has about 56.7 million total U.S. subscribers and 68.3 million international subscribers. It’s always adding original programming in series and movies. And though competing platforms like Amazon Video and Hulu have their strengths, they pale in comparison to what Netflix is doing. Is there any stopping it?
Bigger Than Disney – Even if Just for a Minute
On May 22, Netflix recorded a milestone when its stock passed Disney in market value. Now, this was a short-lived victory – Disney closed at $152.03 billion while Netflix closed the day slightly below that at $151.85 billion – but it was still a milestone worth celebrating for a few hours. One, it’s proof that Netflix’s stocks are surging (the company closed the day up 1.3 percent at nearly $350 per share). Second, Netflix’s accomplishment is significant because it became the first all-digital company to surpass a long established studio with a much richer history.
Another thing that’s interesting about Netflix’s rise to Disney-like levels is that the two are set to become even bigger rivals. Disney, for its part, is still attempting to acquire 21st Century Fox. Additionally, Disney is soon to release its own streaming service that will be packed with original family-friendly programming like a new live action Star Wars series and Disney classics.
While Disney has stated that it will keep its adult Marvel shows (i.e., Luke Cage, Jessica Jones, Iron Fist, Daredevil, The Punisher) with Netflix, it will be pulling its other content from the streaming service. Presently, Disney films like Cars 3 and Moana are available for viewing on Netflix. Oh, and if Disney’s acquisition of Fox pans out, it’ll own even more shares of Netflix’s current chief streaming competitor, Hulu.
Can Anyone Slow Netflix?
One of the neat things about Netflix is how much it has invested into original programming. In fact, in just the first quarter of 2018, original programming from the streaming giant increased by 85 percent from the previous year’s Q1. With the increase in original programming has also come an increase in membership fees, as they’ve risen by 14 percent. Consumers don’t even seem to be batting an eye at these increases, especially as Amazon announced that they’re soon to increase membership to its Amazon Prime – which comes with the Amazon Video streaming service – by $20 per year.
Still, Netflix has its competitors. There’s HBO Now, the soon to be Disney streaming service, and aforementioned streaming competitors in Amazon Video and Hulu. With so much competition in – and entering – the market, Netflix is going to have to work harder to keep current subscribers and continue to grow its subscriber base. This is especially true considering how the streaming services allow consumers to cancel at will, thereby making it easier to juggle between providers when they drop a new show they’re interested in without breaking the bank.
The streaming race is underway, and while Netflix is currently dominating it, it’s far from over. In fact, it might just be heating up. Stay tuned to see how it all unfolds.
Regards,
Ethan Warrick
Editor
Wealth Authority
